4.8 • 36 Ratings
🗓️ 3 March 2017
⏱️ 10 minutes
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0:00.0 | Welcome to the third in our series of Beyond Brexit podcasts. |
0:06.0 | Today we're discussing the outlook for the UK economy, inflation, growth, the government's |
0:11.0 | industrial strategy and the possible impact of trade negotiations. |
0:15.0 | I'm Gayna Bagley, PWC's Head of Corporate Purpose, and I also chair our EU steering committee. And I'm joined by Andrew Sentence, PWC's Head of Corporate Purpose, and I also chair our EU Steering Committee. |
0:21.7 | And I'm joined by Andrew Sentence, PWC's Senior Economic Advisor. |
0:27.0 | So, Andrew, after the vote to leave the EU in June, it feels like the UK economy has held up better than expected. |
0:34.4 | So what do you feel is the short-term outlook for the UK economy? |
0:43.3 | Well, I think you're quite right, Gaynor. The UK economy has done much better than I think many economists expected. But actually as we look back on that, I think we can explain it quite well. |
0:49.3 | First of all, the consumer has kept spending because wages have been increasing faster than inflation. |
0:57.0 | The worries about uncertainty affecting investment are not yet coming through, but they may |
1:03.0 | still come through. And the world economy has held up reasonably well. |
1:07.0 | And it's also worth pointing out that the political situation which looked very rocky after the referendum result as actually stabilized. |
1:14.6 | So it's true that the UK economy has performed quite well in the last six months of 2016, |
1:20.6 | but it's still reasonable to expect slower growth in 2017 and 2018. |
1:26.6 | And so we're expecting about one and a half percent growth in 2017 and 2018. And so we're expecting about 1.5% growth in those two years as inflation comes through and |
1:33.3 | squeezes consumer spending and the investment uncertainty does have some impact on the growth |
1:38.3 | of the economy. |
1:39.3 | Yes, okay, that's interesting. |
1:40.3 | So actually it's shown in the short term we've probably been a little bit more resilient, |
1:43.3 | almost emotionally and politically, than we thought that's had an impact on the economy. You mentioned inflation. So what do you think is the long-term outlook for inflation? Do you see significant increases in inflation? |
1:55.0 | We're certainly set for a period of higher inflation that we've had over the last two to three years. Inflation came down to zero in the UK and in a few months it was actually slightly negative |
2:07.5 | a year or two ago. |
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